Should You Include International Property in Your Portfolio?

‘Bricks and Mortar’ has, for decades, been a guiding principle for savvy investors looking to make a return. While property investments don’t always promise the kind of stellar returns that can be earned on riskier investments, they also don’t come with the downsides. And, over the long-term, all the evidence suggests that property is the best means by which to grow your money. In fact, while data recently published by Heathstone Investments1reveals that, over the course of one year, returns on property investment are eclipsed by those in equities (7% and 12% respectively) – the story is a different one over the longer-term.

Over 10 years, investments in property and equities both return around 8%, while over 15 years, property investments return nearly 12%, while equities return less than 8%. So, while property investment doesn’t always contain the highs and lows of other investment, for those looking to make a stable and long-term return on their money, the data suggests it is the preferable option. With political uncertainty having rocked stock markets and equities in recent years, and with further potential turmoil on the horizon, the case for investing in bricks and mortar has never been stronger.

The question then becomes however, which property to invest in?

For many years, a staple choice for those looking at property investment has been the buy-to-let sector. There are an estimated 2 million buy-to-let investors in the UK, invested in a private rented sector which is home to more than 5 million people. The dynamics behind this market have traditionally been strong, and continue to be so as rising property prices mean younger people spend more time in privately rented homes, prior to one day getting on the ladder themselves. Housing affordability has become a political issue however and the government in recent years has attempted to discourage investment in buy-to-let by raising the level of stamp duty payable on second home and buy-to-let purchases, as well as reducing the amount of tax relief landlords can claim on profits earned through buy-to-let investment.

As a result, increasing numbers of property investors are now looking at the other end of the market – luxury property. There’s good reason for this growing interest. Recent data from Christies International Real Estate reveals a market currently at record levels with the world’s top ten reported property sales all priced above $100 million2 for the first time. And with property investment funds promising double digit returns on luxury investments3, combined with a dwindling number of dividend paying shares available4 to would be investors, it’s easy to see why this new investment class is growing in an era where interest rates and returns on savings around the world remain subdued.

Unlike traditional property investments however, luxury investments may often require more initial capital. While this can be seen as a positive in that greater investment will lead to greater returns, it can also be daunting for somebody new to the market. Furthermore, alongside the question of what to invest, there is also the question of where. With cities from Toronto to Hong Kong selling themselves as the next global property hotspot, this can be more complicated than it sounds.

The Luxury Property Show this October at the London Olympia is a very useful introduction to the exciting world of luxury property investment and a great opportunity to meet likeminded investors, and explore potential opportunities. The show, now in its 10th year, consistently attracts the movers and shakers from the luxury property world who can help guide an investor to making the right choice. Likewise, attending the show can save an investor countless hours and air-miles as they’ll be able to get detailed insights into potential properties ranging from mountain and lake retreats in Northern Europe to luxury loft apartments in New York, via beachfront homes in Dubai.

Alongside insights into luxury properties and property markets around the world, the show also gives potential investors unparalleled opportunities for networking with fellow investors and property consortiums as well as access to a full programme of seminars aimed at seasoned investors, as well as those who are new to the market.

Eddie Sikora, Director, the Luxury Property Show, said: “The luxury property market is growing exponentially at the moment with an unprecedented number of sales topping the $100 million mark. As the old adage goes however, early bird catches the worm, and now really is the time for those thinking about investing in this market to take the plunge.

“Whether you’re a seasoned investor or a complete novice, there are always questions to be considered and contacts to be made. Over the course of the last decade the show at the Olympia has become a central event in the luxury property calendar, and is where people go to develop a better understanding of this complex market and get key insights into the next property hotspot. It’s an opportunity for investors, developers and the real estate community to come together and discuss the key trends and, more importantly, to match those looking to invest with the right property for them.”

The Luxury Property Show runs from 27th – 28th October at the London Olympia. For further information about the show and opportunities to either exhibit or visit, head to http://www.theluxurypropertyshow.com .